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For you to contemplate - A little less than a happy high
komos
komos
For you to contemplate
Suppose for a moment that you are on the board for a large multi-national credit provider and are in the process of drafting a policy in regards to penalties for late payments. Which would you consider a better option:

a) A policy that allows enough flexibility that your customers would retain his account at a relatively reasonable APR; or

b) A policy that is so rigid that the usurous penalty APR is locked in for a period long enough that the card is rendered effectively useless as an financial instrument and ultimately forces the customer to close his account?

Before you answer, consider the following scenario: A customer has offered to pay off his balance in full in order to return his account to good standing. This customer also happens to have a twelve-year history with the company and has, with a few rare instances, retained a satisfactory payment history. Is a non-negotiable 29.9% penalty APR, which you will certainly never collect on, really worth alienating this kind of customer over?

Well folks, American Express thinks it is. Kudos, boys. Your Blue card is very stylish, and will soon be unceremoniously disposed of. The fate of my other account with you is also in danger should a sufficiently enticing offer be provided by another creditor. Given the rate at which I am inundated with such offers, I imagine that one will be received at some point in the next week or so.
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Comments
cook_ting From: cook_ting Date: June 23rd, 2006 04:40 pm (UTC) (Link)
Fuckem' right in the ear!
komos From: komos Date: June 23rd, 2006 04:44 pm (UTC) (Link)
I'm fortunate in that I have the means to be rid of them. 'Course, were I a creditor, if a customer had the means to be rid of me, I'd take that as a sign that I should work a little harder to keep their business.

I'm crazy like that, though, thinking that getting a few bucks a month from a 13% APR and continued use is better than getting nothing from a 29.9% and a closed account.
cook_ting From: cook_ting Date: June 23rd, 2006 04:50 pm (UTC) (Link)
But your irrelivant to them. They only offer consumer credit cards because they provide an easy revenue stream. Losing even 10% of their retail customers is essentially meaningless because of their strong foundation in business circles. Besides AmEx sucks. They charge small businesses rediculous premiums to accept their cards. Kick them to the curb and pay in cash.
komos From: komos Date: June 23rd, 2006 04:56 pm (UTC) (Link)
Ask me some time about my theories around the debtor society...
cook_ting From: cook_ting Date: June 23rd, 2006 09:44 pm (UTC) (Link)
Does it involve bratwurst? I've got a powerful hankering for some beer boiled, grilled bratwurst "theory" right about now ;>
komos From: komos Date: June 23rd, 2006 11:50 pm (UTC) (Link)
Sometime over the weekend? Monday even?
clayrobeson From: clayrobeson Date: June 23rd, 2006 04:53 pm (UTC) (Link)
I had Chase do that to me because I KEPT MY BALANCE TOO HIGH.

I had an assload of debt on their card. Wasn't late with payments, but went over limit (by 100 bucks or so, and ALWAYS paid it off right away) a couple times, so they jacked the intrest rate on a SIGNIFICANT amount of cash to 29.9%.

Thankfully I was able to partially pay off the balance and move what I couldn't. So now it's zero balance, and they still havn't changed the APR.

It amounts to highway robbery, basically.
komos From: komos Date: June 23rd, 2006 04:59 pm (UTC) (Link)
Chase did that to me as well, but it was after they had reduced my credit line (news of The Troubles had reached them) which caused the interest for the month to spike above my limit. At precisely the same time I got word of the credit line reduction, I got word that penalties and an absurd APR were being assessed.

From what I understand, there was a class-action suit against them for this kind of gerrymandering. I didn't get in on it.
teddywookie From: teddywookie Date: June 23rd, 2006 05:28 pm (UTC) (Link)
I used to work for a pawn broker that charged less than that. Still does, too.
komos From: komos Date: June 23rd, 2006 07:03 pm (UTC) (Link)
Maybe they understand the old addage about blood and stones.

...or maybe they're not faceless corporate assholes.
sun_seed From: sun_seed Date: June 23rd, 2006 05:51 pm (UTC) (Link)
had the same instance with Capital One.

~e.
komos From: komos Date: June 23rd, 2006 07:05 pm (UTC) (Link)
I can't say as I'm surprised.

Good news is that this will clear away the last of the cc debt for me. There's other debt, to be sure, but at least I'm out of that cycle.
why_style From: why_style Date: June 23rd, 2006 07:27 pm (UTC) (Link)
hurray for getting out of the cycle!

the real trick is staying out though. twice since college i've paid off all my cc debt and vowed to live hand to mouth, but inevitably within a few months i want something beyond my current means, lack the patience to wait it out (probably fearing that by the time i can afford it, i won't want it anymore), and start the cycle over again. i really hope third time's the charm...
komos From: komos Date: June 23rd, 2006 07:42 pm (UTC) (Link)
What's made this possible is that I've been living largely hand to mouth anyways, coupled with the illusion of cc use with debit cards. There are times when it's useful to be able to extend beyond that, but I try to keep it in check and will get very grumpy if I find myself in a position where it's unavoidable.
schizohedron From: schizohedron Date: June 23rd, 2006 07:43 pm (UTC) (Link)

Tyler Durden was right

I think they count on customer inertia to just keep taking this sort of crap. If a credit card/telecommunications/ cable company is accommodating, I'll be with them for life. I'm not too tough to please. But if they demonstrate they Just Don't Get It, then I'll send the official Ultimatum Arrow whistling over the wall.

When Citibank decided to nix its Visa card and switch customers to Mastercard, I called to cancel. Told them I happened to like Visa and that I wasn't interested in changing horses. When I hung up, I still had a Mastercard, but also a lower APR and a higher limit.

Teddywookie mentions better rates from pawnbrokers. Hell, even a bookie has more patience than a major credit card company. Of course, as the saying goes, with bookies and shys, "your body is your collateral," so YMMV. . . .
sinspired From: sinspired Date: June 23rd, 2006 09:10 pm (UTC) (Link)
Amusingly enough, their merchants fees are so high that few take them, so they're losing out all over...
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